The Credit Union National Association (CUNA) and the leagues last month sponsored a welcome reception on “swearing-in day” of the 112th Congress. It was held at Credit Union House on Capitol Hill. It’s an occasion to greet new and returning legislators, their staffs, and credit union visitors.
That reception, along with other visits to Congressional offices, gave us a solid opportunity to refresh continuing relationships, and begin building new ones.
It also offered credit unions opportunities to discuss legislative priorities for this new Congress—and we stressed priorities when we could.
First among equals on our priority list is supplemental capital for credit unions. Capital for all financial institutions will be a hot topic for this Congress, as policy makers seek ways to avoid future financial crises by requiring financial institutions to hold more capital than they did before the meltdown.
The time is ripe to bring forward supplemental capital. We’ve worked hard to make it clear—through the press and direct communication with policy makers—that credit unions didn’t cause the economic crisis. But we were collateral damage.
As we recover, rebuilding capital ratios is vital. No access to supplemental capital means some credit unions—already hampered by low earnings—along with their members, will face a protracted period of reduced member service, less advantageous pricing, and very slow growth.
In fact, credit unions already are turning people away. That’s tragic at a time when people most need the help credit unions can provide.
We also explained we’ll continue to push for more business-lending authority for credit unions. We made historic progress in the last Congress on this issue, building support from senators on both
sides of the aisle—including the majority leader himself. These senators made a commitment to continue working with us, and we’ll honor that dedication.
Some have asked, “Why do you spend so much political capital on business lending?”
To me, it’s not about spending capital; it’s about building it. The number of people we’ve talked to, and won over, has been significant not only on business lending, but for credit unions generally.
We also brought up interchange. It’s a huge issue for our members. The bottom line: Under the new law and the Federal Reserve’s proposed regulations, consumers will end up paying more for financial services from credit unions.
We’ve asked the House Financial Services Committee to hold hearings on the law and the regulations. We hope this will lead to a reconsideration of what’s quickly proving to be an ill-considered law.
We reminded all that continuing the credit union tax exemption remains a top priority for credit unions.
We acknowledge there’s no immediate threat, but credit unions are paying close attention to all the discourse about addressing the huge budget deficit the country faces. Discussion about expanding the tax base, and lowering tax rates, gets our attention.
The president’s deficit commission didn’t talk specifically about the credit union tax exemption—but it did touch on tax expenditures, which is how our exemption is translated into the federal budget’s language.
We’ve raised our concerns in recent meetings with the Obama administration (including the president’s National Economic Council and the Treasury). I’ve also personally brought it up with new Senate Banking Committee Chairman Tim Johnson (D-S.D.) and others.
This is just a sampling of what we discussed as the 112th Congress gathered last month. Other top priorities include addressing the National Credit Union Administration’s budget increases, corporate restructuring, dealing with the new Consumer Financial Protection Bureau, and strengthening our credit union grassroots.
But there remains one key goal in our sight: working to give credit unions the best operating environment possible.
That’s tops for us.
BILL CHENEY is president/CEO of the Credit Union National Association.